Argentina's annual consumer price inflation reached 211% in February 2026, according to INDEC, the national statistics agency. While the monthly rate has decelerated from a peak of 25.5% in December 2023 to approximately 8% in early 2026, the cumulative effect continues to erode purchasing power for the country's 46 million citizens. The peso has lost over 90% of its value against the US dollar since President Javier Milei took office in December 2023.
Milei's Shock Therapy
President Milei's economic programme has centred on fiscal austerity and deregulation. His government achieved a primary fiscal surplus in 2024 for the first time in over a decade by cutting public sector jobs, freezing infrastructure spending, and reducing energy subsidies. The central bank's monetary base has contracted in real terms as Milei's team works to eliminate the quasi-fiscal deficit created by interest payments on short-term central bank debt instruments (Leliqs and Pases).
The government devalued the official exchange rate by 54% upon taking office in December 2023, from 366 to 800 pesos per dollar. A crawling peg of 2% monthly has been maintained since, allowing gradual real appreciation as inflation has outpaced the crawl rate. The parallel market "blue dollar" rate has converged with the official rate, eliminating the longstanding gap that had distorted Argentina's economy.
Dollarisation Debate
Milei campaigned on a promise to dollarise the economy, replacing the peso with the US dollar entirely. However, implementation has been delayed indefinitely. Economists estimate Argentina would need approximately $30-40 billion in dollar reserves to credibly dollarise, far exceeding the central bank's current net reserves, which remain negative when accounting for forward contracts and swap lines with China.
Critics argue that dollarisation would remove the ability to use monetary policy as a countercyclical tool and could permanently disadvantage Argentine exporters. Supporters counter that Argentines have already effectively dollarised their savings, with an estimated $200-300 billion held in dollar-denominated assets outside the formal banking system.
Social Impact
The poverty rate has risen to approximately 57% of the population, according to the Catholic University of Argentina. Real wages have fallen by an estimated 20-25% since the devaluation. University funding cuts and pension adjustments below inflation have triggered repeated protests and general strikes.
For Argentine economic data, visit INDEC. For IMF programme details, see IMF Argentina.